Here’s what happened when Miracle Messages gave cash transfers to unhoused people

Good News Notes:

For the last six months, a San Francisco-based nonprofit that works with people experiencing homelessness tried a simple experiment: If it gave some people a small basic income of $500 a month, how much could it help?

The nonprofit, called Miracle Messages, pairs unhoused people with volunteer “buddies” who make weekly calls and texts and offer support. (The volunteers also use social media to reconnect people experiencing homelessness with family members with whom they’ve lost touch.) The volunteers realized that even small amounts of money could make a difference in these people’s lives. “We were just hearing more and more from our volunteers that hey, my unhoused friend is just in need of a few hundred dollars here and there to address these problems that are really stumbling blocks from helping them get housed or stabilized,” says Kevin Adler, CEO and founder of Miracle Messages.

Inspired by a successful program in Vancouver that gave $7,000 cash transfers to homeless participants, the San Francisco nonprofit decided to try the same thing on a smaller scale. With a limited amount of money from donors for the pilot—$50,000—it decided to give 15 people $500 a month for 6 months.

“We didn’t know if this was going to work; we didn’t even know how to properly administer this, how to set up bank accounts, how to give people financial-literacy coaching, how to avoid ‘cliff effects’ so people didn’t lose benefit eligibility,” he says. “So, we were just like, let’s pick a ticket amount that no one should blink twice at. It’s not large sums of money, but it’s still meaningful enough that it could make a significance difference for people who have a good plan in place for how to use it.”

The group asked its volunteers to nominate people for support, and then selected a small cohort based on factors like diversity, how long someone had been experiencing homelessness, and ongoing engagement with the Miracle Friends program. People who were currently struggling with addiction or in early recovery weren’t eligible.

With the caveat that the funds shouldn’t be spent on drugs or other illicit activity, participants could spend the money however they needed. “There’s, I think, a lot of implicit paternalism in the homeless services space,” says Adler. “It was really important in our program design that we move past that, that we’re not coming to the table with an assumption that we know better than you do how to spend funds.” One woman, for example, used some of the money on necessities but also donated a small portion back to the organization. “When I asked her, ‘Why on earth did you do this? There’s no expectation, you didn’t need to do this,’ she said, ‘I didn’t do it for you. I did it for myself. And I’m doing it so I can once again feel the dignity of being able to support a cause that I believe.’”

Participants used the money on essentials like food and medication and transportation. One person used it to adopt a service dog to help prevent seizures. Another helped his daughter pay for college tuition. Sixty-four percent of participants said that the money helped reduced their stress and worry about finances. And despite the relatively small amount of assistance, more than a third of the participants were able to move into housing….”

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